Trinity Fruit Company, Inc. v. La Rosa & Sons Distributing LLC ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 TRINITY FRUIT COMPANY, INC., a No. 1:19-cv-00095-DAD-EPG California Corporation, 12 Plaintiff, 13 ORDER GRANTING APPLICATION FOR v. ENTRY OF JUDGMENT AGAINST 14 DEFENDANT LORA VILLARREAL LA ROSA & SONS DISTRIBUTING 15 LLC, a California Limited Liability (Doc. No. 29) Company, et al., 16 Defendants. 17 18 19 Plaintiff Trinity Fruit Company, Inc.’s first amended complaint, which was filed on 20 February 8, 2019, alleges that plaintiff brings this action to enforce the trust provisions of section 21 5(c)(5) of the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. § 499e(c)(5) against 22 represented defendants La Rosa & Sons Distributing LLC, Michael J. La Rosa, and Noel La 23 Rosa, as well as pro se defendant Lora Villarreal. (Doc. No. 7 at 2.) 24 On May 21, 2019, plaintiff and defendant Villarreal filed a stipulation and application for 25 a final order and judgment. (Doc. No. 22.) The stipulation provided that plaintiff’s claims 26 against defendant Villarreal would be satisfied pursuant to a payment of $13,506.35 in monthly 27 installments of $100.00, commencing on May 30, 2019 and ending when the payment is made in 28 full. (See Doc. No. 22 at 1–2.) The stipulation also provided the following in relevant part: 1 In the event that Villarreal defaults in her payment obligations as set forth in Paragraph 2 above, and Villarreal either fails to cure such 2 default or is not allowed to cure such default pursuant to Paragraph 3 above, then upon the filing with the Court of a declaration as to 3 such default by Plaintiff’s attorney, with a copy to Villarreal via email at jazantonalex@gmail.com, this Court shall immediately 4 enter a Final Order and Judgment in a form substantially similar to the one attached hereto as Exhibit A. The judgment amount 5 prescribed in the Final Order and Judgment in favor of Plaintiff and against Villarreal shall be the amount of the PACA Trust Debt 6 prescribed in Paragraph 1 above plus any additional attorneys’ fees and costs incurred by Plaintiff as a result of Villarreal’s default, plus 7 all interest accrued at the rate of 18% per annum, less any payments made to Plaintiff pursuant to this Stipulation and Order. 8 9 (Id. at ¶ 4.) The parties requested that the court retain jurisdiction over this action to enforce the 10 terms and conditions of the final judgment against defendant Villareal. (Id. at ¶ 9.) On June 12, 11 2019, the court issued an order giving effect to the parties’ stipulation, dismissing defendant 12 Villareal, and retaining jurisdiction over enforcement of the settlement agreement. (Doc. No. 25.) 13 Following defendant Villareal’s dismissal, the remaining parties filed a stipulation and proposed 14 order for dismissal without prejudice on June 14, 2019. (Doc. No. 26.) The court gave effect to 15 that stipulation on June 25, 2019, and the action was administratively closed. (Doc. No. 27.) 16 On March 2, 2020, plaintiff filed an application for entry of final order and judgment 17 against defendant Villareal. (Doc. No. 29.) Attached to plaintiff’s filing is the declaration of 18 plaintiff’s counsel C. Russell Georgeson (Doc. No. 31), which states the following. Defendant 19 Villarreal made payments to plaintiff in July, August, September, and October 2019 totaling 20 $400.00. (Id. at ¶ 8; see also Doc. No. 31, Ex. B.) Defendant Villarreal then failed to make the 21 payments due in November 2019 through January 2020. (Doc. No. 31 at ¶ 8.) On January 24, 22 2020, plaintiff’s PACA counsel sent a notice of default to defendant Villareal as contemplated by 23 the parties’ stipulated resolution of this action. (Id. at ¶ 9; Doc. No. 31, Ex. C.) The default 24 notice requested that defendant Villarreal pay the overdue sum within three days of the date of the 25 demand and reminded defendant that a failure to cure would result in plaintiff immediately 26 seeking entry of judgment against her. (Doc. Nos. 31 at ¶ 9; 31, Ex. C.) Defendant Villareal 27 responded stating that she would mail a check numbered “436” for $300.00 to plaintiff by the 28 following Monday. (Doc. Nos. 31 at ¶ 9; 31, Ex. C.) Subsequently, defendant Villarreal’s check 1 was returned by her bank for insufficient funds. (Doc. No. 31 at ¶ 10; see also Doc. No. 31, Ex. 2 D.) Plaintiff advised defendant Villarreal of the returned check and, on February 7, 2020, asked 3 if it could redeposit the check. (Doc. No. 31 at ¶ 10.) Defendant Villarreal stated she would send 4 a money order on February 19, 2020. (Id.) The promised money order never arrived, and as of 5 March 2, 2020, defendant Villarreal remained in default. (Id.; see also Doc. No. 31, Ex. E.) 6 On January 15, 2021, the court directed the parties to submit supplemental briefing 7 providing additional information regarding service of the Georgeson Declaration (Doc. No. 31) 8 on defendant Villareal, an updated amount of the judgment sought with supporting 9 documentation, and an updated status of defendant Villareal’s default since plaintiff had filed the 10 application for entry of final order and judgment on March 2, 2020. (Doc. No. 32.) On January 11 25, 2021, plaintiff’s counsel attorney Gregory Brown submitted a supplemental declaration and 12 exhibits. (Doc. No. 33.) To date, defendant Villareal has not responded to the application for 13 entry of final order and judgment or to the court’s request for supplemental briefing, or otherwise 14 communicated with the court in any way whatsoever.1 15 In attorney Gregory Brown’s declaration, he states that due to a clerical error, plaintiff 16 mistakenly served defendant Villarreal by United States mail, rather than electronic email as 17 required by the parties’ May 21, 2019 stipulation. (Id. at ¶ 3; see also Doc. No. 22 at ¶ 4.) 18 Plaintiff submits that this error should not be fatal to their application to enter judgment because 19 defendant Villarreal confirmed receiving the application by email on March 5, 2020. (Doc. No. 20 33 at ¶ 3; Doc. No. 33, Ex. A.) Therein, defendant Villarreal stated that she would be seeking an 21 attorney for further assistance and would forward attorney Brown’s information accordingly. 22 (Doc. No. 33, Ex. A.) Attorney Brown states that as of January 25, 2021, he has not heard any 23 further from defendant Villarreal or from any representative on her behalf. (Doc. No. 33 at ¶ 3.) 24 Additionally, attorney Brown states that plaintiff mistakenly included lead counsel’s total 25 fees in the case when filing the application for entry of final order and judgment. (Id. at ¶ 4.) In 26 1 On January 25, 2021, attorney Georgeson filed a certificate of service, in which he certifies that 27 the Brown Declaration and exhibits thereto were served on counsel for defendants Michael J. La Rosa and Noel La Rose by email and on defendant Villarreal by email and United States mail. 28 (Doc. No. 34.) 1 the May 21, 2019 stipulation, however, the parties had stipulated that the judgment amount would 2 include “any additional attorneys’ fees and costs incurred by Plaintiff as a result of Villarreal’s 3 default.” (See Doc. No. 22 ¶ 4) (emphasis added). Attorney Brown states that since the filing of 4 the May 21, 2019 stipulation, plaintiff has incurred de minimis additional attorneys’ fees 5 expenses, which plaintiff will waive. (Doc. No. 33 at ¶ 4.) Nonetheless, since plaintiff filed the 6 application for entry of final order and judgment on March 2, 2020, additional interest has 7 accrued at a daily rate of approximately $13.32, for a total additional interest of $4,382.72. (Id. at 8 ¶ 5.) Attached to the Brown Declaration is an updated damages calculation reflecting the updated 9 interest calculation. (Id., Ex. B.) Attorney Brown states that defendant Villarreal has not paid 10 any portion of the debt except as credited in plaintiff’s prior application, nor any further sums 11 pursuant to the May 21, 2019 stipulation. (Id. at ¶ 6.) Plaintiff therefore requests that the court 12 enter judgment against defendant Villarreal in the amount of $23,990.42 under the trust 13 provisions of PACA. (Id. at ¶ 7.) Attorney Brown states that this total judgment amount includes 14 the principal amount of $13,506.35, less the $400.00 defendant Villarreal paid pursuant to the 15 May 21, 2019 stipulation, plus accrued interest through January 22, 2021 in the aggregate amount 16 of $10,884.07. (Id.) 17 The court will grant plaintiff’s application for entry of judgment, but subject to a 18 modification of plaintiff’s requested judgment amount. The district court is afforded discretion in 19 its calculation of prejudgment interest. See Citicorp Real Estate, Inc. v. Smith, 155 F.3d 1097, 20 1107 (9th Cir. 1998) (“A district court’s award of pre- and post-judgment interest is reviewed for 21 abuse of discretion.”). Here, the May 21, 2019 stipulation stated that the judgment amount would 22 include “all interest accrued at the rate of 18% per annum.” (Doc. No. 22 at ¶ 4.) The updated 23 damages calculation attached to the Brown Declaration calculates interested accrued as interest 24 on the entire debt to be collected from all defendants—not just defendant Villarreal’s portion of 25 the debt. (See Doc. No. 33, Ex. B.) Considering defendant Villarreal’s pro se litigant status, the 26 court finds that an interest calculation based upon plaintiff’s reading of the May 21, 2019 27 stipulation would not comport with principles of fairness. Rather, the court finds that a 28 calculation of interest accrued solely on defendant Villarreal’s portion of the debt embodies a 1 fairer reading of the parties’ stipulation. As such, the court will enter judgment against defendant 2 Villarreal in the amount of $18,548.38: the principal amount ($13,506.35) plus interest 3 ($5,442.03), less what defendant has already paid ($400.00). 4 Accordingly, 5 1. Plaintiff Trinity Fruit Company, Inc.’s application for entry of final order and 6 judgment against defendant Lora Villarreal (Doc. No. 29) is granted; 7 2. Plaintiff is a qualified trust creditor and beneficiary, under the provisions of 8 PACA, of defendant Lora Villarreal for a debt in the principal amount of 9 $13,506.35, plus interest at the rate of 18 percent per annum in the amount of 10 $5,442.03, less the $400.00 she has paid, for a total judgment amount of 11 $18,548.38 under the trust provisions of PACA, 7 U.S.C. § 499e(c); 12 3. Defendant Villarreal shall within five (5) business days of service of this order, 13 turnover any and all funds realized from the sale of produce or products derived 14 from produce in their possession to McCarron & Diess, attorneys for plaintiff, 15 located at 576 Broadhollow Road, Suite 105, Melville, New York, 11747, for 16 distribution to plaintiff; 17 4. Any and all funds belonging to defendant Villarreal in the possession of third 18 parties shall be immediately turned over to McCarron & Diess, attorneys for 19 plaintiff, located at 576 Broadhollow Road, Suite 105, Melville, New York, 11747, 20 for distribution to plaintiff; 21 5. Defendant Villarreal shall supply to plaintiff’s attorney, within five (5) days of the 22 date of this order, any and all documents in her possession, custody or control with 23 reflect or relate to her assets and liabilities, including but not limited to her most 24 recent income tax returns, pay stubs and checking and savings account statements; 25 and 26 ///// 27 ///// 28 1 6. The Clerk of the Court is directed to close this case which was previously 2 administratively closed. 3 | IT IS SO ORDERED. a 7. Dated: _ February 20, 2021 VL AL oye 5 UNITED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28